Everything You Need to Know About Dormant Trading Account

A trading account is essential and is mandatory whenever you decide to trade in the stock market. You cannot perform any transactions to buy and sell your Demat account securities if you do not have a trading account under your name. You need a trading account for buying and selling shares, bond funds, debentures, etc. You can open a trading account with the DP of your choice if you have all the required documents in your possession. You can also create a trading account for your children. It will be a trading account for minors.

So if you are wondering now, “What will happen if my trading account is dormant?” You will not be allowed to perform any transactions from your trading account. In short, if the trading account becomes dormant, investors will not perform any transactions in the stock market using their dormant trading account.

There is no other way around it, as many investors open a trading account and fail to maintain it, and their trading account eventually becomes dormant. Hence, if the trading account becomes dormant, you will have to reactivate it to perform any transaction using it.

Definition

A trading account is essential, and you can open a trading account through a broker. And you still wonder, “if my trading account becomes dormant”, you have the full right to contact your broker for that. If a trading account becomes dormant, you haven’t performed any transactions using your trading account for a long time. Usually, that time frame can stretch up to eleven months, but it depends on your DP.

If your trading account becomes dormant and you wish to restart your trading in the stock market world, reactivate your trading account.

A trading account is the backbone of all the transactions performed in your stock market. If a trading account becomes dormant, you will lose access to the facilities of your trading account as your broker will not allow you to access it until or unless you reactivate your dormant account via the proper steps given by your broker. Every broker may have their requirements and needs regarding reopening your trading account. You will have to follow them mandatorily if you wish to reopen your trading account and gain access to its facilities.

Activity

If your trading account has become dormant, then it is vulnerable to fraud by individuals who have the potential to misuse your dormant account. If any transaction is performed through your dormant account, it may even ask for the authorisation of its actual owner, and it may even ask to be reactivated. Furthermore, any translation in the dormant trading account will be traded at the complete sensitivity of the DP. So make sure to keep your trading account active by performing transactions.

Reactivation

The investor who opened a trading account and was unable to maintain it can ask questions like, “What happens if my trading account is dormant?”. So, you don’t need to worry as facilities can reactivate your trading account. If a trading account becomes dormant, you have the complete liberty to contact your DP regarding the reactivation process. There are specific steps involved in that process, like if you wish to reactivate your dormant account online.

The individual looking to reactivate their dormant trading account will have to fill in all the KYC details. In addition, they will have to make sure that their information is entirely accurate and authorized. The demand for the documents and other verification is mainly based on the investor’s broker. The broker can ask for any details, and the client who wishes to reopen the dormant account will have to fill in all the information.

Remember, the broker of your dormant trading account may ask for a fee to reactivate your dormant account. The fee and the process for reactivating the dormant trading account will have to be followed by the investor properly.

Your trading account may take up to 2–3 days to reactivate. The exact number of dates entirely depends on your broker. Make sure your KYC is completed correctly; some brokers may even request IPV or in-person verification. Only after your broker is thoroughly satisfied with your documents and KYC will he proceed with your request to reactivate your trading account.

Maintenance

Your broker will ask you to pay account maintenance charges to maintain your training account. You will have to pay that in return for all the facilities provided by your broker. There may be account opening charges as well. The broker may also inform the investor about the lack of transactions performed, and they will also inform you via email or phone call that they will stay dormant in your trading account if you keep on ignoring it. So, if you want your trading account to remain active, you need to pay attention to it. And keep in mind that whenever you go into reactive mode on your trading account, your broker may as well inform you of all the dues that have to be paid. 

Conclusion

Anyone with the proper documents has the liberty to open a trading account and trade in the Indian stock market. However, many investors just open a trading account and do not perform any transactions. For these reasons, the trading account owner’s broker has the authority to close such an account. 

If a trading account becomes dormant, the account holder will lose all the facilities provided by their trading account. They will have to contact their broker regarding their trading account’s reactivation steps and procedure. There may be charges involved for that to happen, but the account holder will have to pay those charges if they want to regain access to their trading account. Hence, keep your trading account active, and if you fail to do so, contact your broker to provide you with proper guidance.